Conforming loan limits: how the FHFA number works and what happens above it

The conforming loan limit is the largest mortgage Fannie Mae and Freddie Mac will buy. Below it you get the cheapest, most standardized financing in the market; above it you are in jumbo territory with different rules.

How the number is set

The Federal Housing Finance Agency publishes new limits each November for the following year, adjusting the baseline by the annual change in the FHFA House Price Index. The baseline applies to one-unit properties in most counties; higher limits apply to two-, three- and four-unit properties. In counties where the local median home price is high, the limit rises to as much as 150% of the baseline (the “ceiling”). Alaska, Hawaii, Guam and the U.S. Virgin Islands use the ceiling by statute. Check the current figures for your county on FHFA’s lookup — we do not reprint numbers that change every year.

High-cost areas

Counties in and around San Francisco, Los Angeles, San Diego, Seattle, Boston, New York City, Washington D.C., and several resort areas carry limits above baseline. The limit is set by county (or metropolitan area), so a buyer a few miles across a county line can face a different ceiling. Within a high-cost county, loans above baseline but within the county limit are sometimes called “high-balance” or “super-conforming” and carry a small pricing adjustment.

What the limit buys you

Down payments as low as 3% to 5%
PMI that cancels under federal rules
Automated underwriting with standardized documentation
Broad lender competition and easy refinancing
Access to HomeReady, Home Possible and state HFA programs

Above the limit

A jumbo loan is held by the lender or sold to private investors. Expect a 10% to 20% down payment, a 700+ credit score, lower DTI ceilings (often 43%), six to twelve months of reserves, and full documentation with no automated shortcuts. Jumbo rates are sometimes below conforming rates for the strongest borrowers and above them for everyone else.

Staying under the limit

Buyers near the threshold often bring a larger down payment so the loan fits within the conforming limit, or use a conforming first mortgage plus a second mortgage (a “piggyback”) for the excess. Both approaches keep the main loan in the cheaper, more flexible conforming market.

Frequently asked questions

Is the conforming limit the same as the FHA limit?

No. FHA sets its own limits by county — a floor of 65% of the conforming baseline and a ceiling equal to the conforming ceiling — so FHA limits are lower than conforming in most of the country.

Does the limit apply to the price or the loan?

The loan amount. You can buy a home above the limit with a conforming loan if your down payment brings the loan under it.

When do new limits take effect?

January 1, for loans delivered to Fannie Mae or Freddie Mac in the new year; many lenders begin honoring the new limits as soon as they are announced in late November.